A new rule by the Obama Administration spurred BlackRock to cut prices on 15 of its exchange-traded funds. Fred Katayama reports.
The cost of investing for retirement keeps getting cheaper. BlackRock cut prices on 15 of its exchange-traded funds. It lowered the cost of its popular iShares Core funds by 0.02 to 0.05 percentage points. For example, that means the price for investing $10,000 in its flagship iShares core S&P 500 ETF with a 5 percent return for one year drops to $4 from $7. ETFs and index mutual funds passively track the markets like the Dow and S&P 500, unlike actively managed funds that try to beat their benchmark indexes. Investors attracted by their cheaper prices have been switching to ETFs and index funds. Driving the world's largest asset manager to cut prices: the Obama Administration's new rule announced in April requiring financial brokers to put the interests of their clients ahead of their own. BlackRock is betting more financial advisers will recommend ETFs for their customers. BlackRock's global head of iShares, Mark Wiedman said, "To meet this historic shift, we aim to set a new market convention for core investing and long-term investors." Fidelity Investments made a similar move in June, cutting prices on 27 index mutual funds and ETFs.